PLEASANTON (CBS 5) -- A Pleasanton company that promises to help struggling homeowners get loan modifications is facing criminal charges.

American Financial Funding, Inc. of Pleasanton is accused of illegally charging an East Palo Alto couple $4,000 to help them get a loan modification. Prosecutors say the company also made false statements to the couple.

Alameda County Deputy District Attorney David Lim says it's illegal for anyone in California to charge up front for a loan modification. "That's the end of the conversation. If you're going to do loan modifications you cannot accept advance fees," Lim told CBS 5 ConsumerWatch.

The president of American Financial Funding, Steve Shlett, told CBS 5, "There's definitely been some kind of misunderstanding." Shlett said his company helps customers prepare their documents and sends those papers to their lender. He contends customers are paying for that service.

Prosecutors say American Financial Funding also goes by the name Provident Financial and the Liberty Law Firm.

CBS 5 ConsumerWatch previously reported on Provident after the company sent around 2,000 letters to homeowners informing them that they were in foreclosure. Corey Hill of the company said that he "made a huge mistake" in sending the letters.

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